Study On Introduction Of Margin Transaction System To China Security Market

Since the foundation of Shanghai Security Exchange in 1990,China's security market has developed rapidly. But among 14 year's development, there is still prominent problem: the market fluctuated frequently and fiercely, and speculating behaviors prevailed in the market. Furthermore, the transaction approaches are limited, investors can only long in the market. All these above will be harmful to the development of the market.So, it is vital to introduce a transaction system to decrease the volatility of the market and to enrich the transaction approaches.Margin transaction system meets these needs rightly. One important function of this system is to decrease the amplitude of market fluctuation. In this system, investor not only can long, but also can short.Though margin deal is prevailing in western security market, it is forbidden in our stock market, because our people traditionally relate it to speculating behaviors.One purpose of this paper is to analyze in detail the relationship between margin transaction system and stock market volatility, and point out clearly that there is no certain links between two things.The other purpose is to make a preliminary plan for the frame of our future margin transaction system, In the wake of analysis on margin system of America , Japan and Taiwan region, we give out some guidelines to establish our margin system, and make a design for some detailed aspects.The main contents of this paper are the followings:In the introduction, we present purpose and innovations of this paper, and also introduce the relevant researches of home and abroad.In chapter 1, we discuss the concept of the margin deal, and also it's advantages and disadvantages. We also review relevant situation of our security market.In chapter 2,we make an elaborate theoretical analysis on the relationship between margin transaction and stock market volatility or speculation, and clarify the prevailing wrong views which agrees that margin transaction will induce speculation.In Chapter 3 ,we analyze three typical margin transaction systems in the world: that of America, Japan and Taiwan region.In Chapter 4 ,we makes a preliminary plan for our future margin transaction system.